CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS.

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1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS A. General description of the small scale project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the proposed small scale project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring information 1

2 Revision history of this document Version Date Description and reason of revision Number January 2003 Initial adoption 02 8 July 2005 The Board agreed to revise the CDM SSC PDD to reflect guidance and clarifications provided by the Board since version 01 of this document. As a consequence, the guidelines for completing CDM SSC PDD have been revised accordingly to version 2. The latest version can be found at < December The Board agreed to revise the CDM project design 2006 document for small-scale activities (CDM-SSC-PDD), taking into account CDM-PDD and CDM-NM. 2

3 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Project title: Penha Renewable Energy Project PDD version number: 2 Date: March 24, 2008 A.2. Description of the small-scale project activity: The project activity consists of displacing fossil fuel by using renewable biomass 1 for thermal energy (steam) generation at Penha Papeis e Embalagens Ltda (Penha), a recycled paper manufacturer. The project activity is located at Penha s facility in Santo Amaro state of Bahia, in Brazil. The project aims at reducing green-house gas emissions by burning renewable biomass instead of oil, as fuel in a decisions scenario to implement a new boiler. Biomass emissions are considered carbon neutral due to its biogenic origin. The project follows decision 17.CP7, at CMP.1, item G Validation and Registration, at paragraph 46: 46. The baseline may include a scenario where future anthropogenic emissions by sources are projected to rise above current levels, due to the specific circumstances of the host Party. Steam is used along the recycled paper production process as a source of heat for drying. Drying operations are critical in achieving the required quality of paper products; therefore steam supply is a very important component of Penha s operations. In the second semester of 2005 Penha Group acquired the Paper Production facility of Santo Amaro from Economic Group. When Penha Group arrived at the facility there were 2 boilers to steam production. One of them was an oil-fired boiler CBC that was in use at that time and the second one was and wood-fired MEPAN boiler scrapped and not operational. The MEPAN boiler was installed by the previous facility owner since there were surrounding company-owned eucalyptus forests that were used as biomass source. That biomass source started declining at 2002 until When the eucalyptus forests started to decline in 2002 due to unsustainable management, a few tests burning bamboo as fuel were carried out on the MEPAN boiler. Bamboo is very rich in silica. As a result, bamboo used in the fuel tests formed a silicate which damaged the MEPAN boiler. This issue first developed on the burning base, which would constantly become clogged. The damage caused to the boiler was such that the steam produced was not enough to support production, both in quality and quantity, ending with the boiler lifetime. When Penha arrived in 2005, only the oil fired boiler was operational and was not enough to supply the facility. Penha had 3 possibilities to provide the supply of steam to it s operation. One is to install a new oil-fired boiler, the second one was to install a wood based boiler buying biomass from local market and third was to develop a boiler able to use bamboo as biomass. As will be demonstrated in sections B4 and B5 of this document the most plausible scenario was to use oil-fired boiler and the scenario considering bamboo as renewable biomass is additional. 1 This methodology applies the definition of renewable biomass provided in Annex 18 EB23, 3

4 H. Bremmer & Filhos Ltda.(Bremmer), a boiler manufacturer, was contracted to study a solution to technical limitations of bamboo used as fuel to the boiler. During the development of bamboo based boiler, the damaged MEPAN boiler was sold as scrap and the biomass boiler burning Pinus from the market was rented from Bremmer to temporarily generate complementary steam necessary for production, along with the CBC oil-fired boiler. Since the renewable wood was not available at Penha s existent forests, local market can not provide long term contracts to supply wood for Penha s operation and bamboo faces important barriers to it s usage, the common practice would be the usage of oil boiler to steam generation. Meanwhile, a technology that avoided silicate formation was being tested. In 2006 Bremmer, designed and adapted a boiler that ran efficiently on bamboo biomass by using a rotating burning base system. The result was a boiler with generation capacity of 25 tonnes of steam per hour, large enough to meet the current demand of the facility of 10 to 14 tonnes of steam per hour. At the same time, Penha started it s CDM project. Bremmer specified the operational design parameters presented at table 1 below: Bamboo Calorific Value (kcal/kg) 2,600 Efficiency % 85,16 Heat Output (kcal/h) 17,235,062 Fuel Input (kg/h) 6,628 Boiler Capacity 25 Tonnes of Steam/hour Steam Enthalpy kcal/kg Operating Pressure 15 kg/cm 2 Steam Temperature 200 ºCelsius Table 1 Bremmer s specifications for the Bamboo-fired Boiler Source: H. Bremmer & Filhos Ltda HBFS-25 Technical Information The process to generate the steam necessary for paper production commences with the bamboo processing. After harvesting, bamboo is received at Penha s for weighting, chipping and temporary storage. Air dried bamboo chips are then combusted in the horizontal Bremmer HBFS 25 boiler with a mix circuit of water-tube and fire-tube. Figure 1 shows the schematic of the new biomass-fueled boiler. 4

5 Figure 1: Bremmer Biomass-fueled boiler model HBFS 25 Source: H. Bremmer & Filhos Ltda. An automated conveyor belt feeds the biomass fuel into a continuous water-cooled burning grill. The boiler is dimensioned according to the energy content of the biomass, achieving complete combustion when fed at a constant rate with bamboo chips. The system is equipped with primary and secondary combustion air intakes. A fan blows the primary combustion air through the burning grill thus gasifying the biomass fuel. Secondary combustion air is pre-heated and blown at a calculated rate over the fuel to create turbulence and facilitate a complete combustion. Biomass fuel moves through the grill by a series of pneumatic chains rotating at adjustable speeds. Ashes are collected and landfilled, and the steam produced by the boiler is distributed through the plant for drying applications. A bimonthly stop of the Bremmer boiler is necessary for inspecting and cleaning silicate built-up. These maintenance stops are scheduled along with plant s monthly preventive maintenance shut-downs. During any unscheduled stopped, an oil-fired boiler (CBC boiler) will be used for steam generation. Penha s Forest Management Department supervises the activities of the bamboo suppliers and provides safety training and monitors working conditions of the bamboo harvesters. Over 300 harvesters are formally employed by the bamboo suppliers. Since Penha is located in a very poor region of Bahia State, this project contributes strongly to the development of the region, and brings sustainable development to the Santo Amaro municipality and other cities nearby. A potential 4 th scenario, considering the utilization of gas was not considered since it was not available at Santo Amaro city to industrial usage and its cost is too high. The project activity also contributes to sustainable development by avoiding oil consumption for steam generation. Since bamboo emissions are carbon neutral, green-house gas emissions from oil are displaced. Oil combustion is also a source of sulfur dioxide and metals emissions which have an adverse effect on human health and the environment. 5

6 Specifically considering social aspects, the project bring positive impacts as growth of employment, support to the development of local entrepreneurship, local workforce training at industrial and countryside areas, partnership with SESI to supply educational courses and introduction of safety training program at agricultural activities. A.3. Project participants: Name of Party Involved (*) ((host) indicates a host Party) Private and/or public entity(ies) project participants (*) (as applicable) Kindly Indicate if the Party involved wishes to be considered as a project participant (Yes/No) NO Penha Papeis e Embalagens Brazil (Host) Ltda Key Associados NO (*) In accordance with the CDM modalities and procedures, at the time of making the CDM-PDD public at the stage of validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the Party(ies) involved is required. Table 2 Party (ies) and entities private/public involved in the Penha Project activity. A.4. Technical description of the small scale project activity: A.4.1. Location of the small-scale project activity: Brazil A Host Party(ies): A Region/State/Province etc.: Northeast, Bahia A City/Town/Community etc.: Santo Amaro, BR 420 Highway Km 16, Pitinga Farm A Details of physical location, including information allowing the unique identification of this small-scale project activity: Factory located at BR 420 Highway, Km 16, Pitinga Farm S/N Bamboo fields: Capanema farm, total area of 740 acres, 579 acres of planted bamboo, located in the municipality of Santo Amaro. Subaé farm, total area of acres, 455 acres of planted bamboo, located in the municipality of Santo Amaro. 6

7 São Lorenço farm, total area of acres, 859 acres of planted bamboo, located in the municipality of São Francisco do Conde. Monte Alto farm, total area of acres, 957 acres of planted bamboo, located in the municipality of São Francisco do Conde. A.4.2. Type and category(ies) and technology of the small-scale project activity: Type (i): Renewable energy projects. Category C: Thermal energy for the user. The project is a small scale project activity and falls under the category I.C according to the Annex II of the Simplified Modalities and Procedures for Small-Scale CDM project activities Thermal energy for the user. This methodology applies to renewable energy technologies that supply user with thermal energy that displaces fossil fuels, stating that thermal generation capacity shall be less than 45 MW. The Bremmer boiler is expected to run at 15 tonnes of steam per hour, about 60% of its capacity, with an average gross paper production average of 6 tonnes of paper per hour, during Penha has no immediate plans to expand its production, thus there is no foreseeable increase in the amount of steam produced. In any event, the biomass-fueled boiler maximum capacity is 25 tonnes of steam per hour, or 19.4 MW, as specified by the manufacturer. Capacity calculations are included in section B.2 of this document. Environmental and Safety Information Penha s facility in Santo Amaro complies with environmental and safety regulations and has all pertaining operating licenses. Aspects of potential environmental and safety implications are discussed as follows: Land Use No change in land use is expected, as the area of bamboo is already planted, and steam generation occurs within the constructed area of the plant and the implementation of a forestry management at bamboo production. As required by the Brazilian Forestry Code, Penha s bamboo fields maintain the required percentage of forested areas. Air Pollution Even though there are no regulations regarding emissions from point sources in Brazil, emission control technologies for particulate matter are in place and operating at the exit of the biomass boiler. In addition, since the project activity consists of burning renewable biomass, CO 2 emissions are considered zero, resulting in lesser GHG emissions. Burning biomass is also expected to avoid SO x, NO x and hydrocarbons emissions from dislocated fossil fuels, as well as VOC and CH4 fugitive emissions from fuel storage and handling. Ashes collected from the burning base and the pollution control system are collected in steel drums and disposed of in a managed landfill. 7

8 Water Pollution The project activity does not interfere with water reservoirs, underground water or waterways. Water used in by the boiler is re-circulated, aiming at reducing water consumption for steam generation. Noise Pollution and Vibration The project activity does not generate noise impacts or vibration to area residents, as the boiler is located within a building that shelters the equipment and provides an acoustic barrier. Noise levels inside the building are clearly signaled and Penha s staff is required to use appropriate PPE when working around the area. Soil Quality There are no impacts on agricultural or other soils due to the implementation of this project activity. Flora/Fauna There are no foreseeable effects on flora or fauna due to the project activity, since it takes place within Penha s facility. No records of endemic or endangered species exist for the area of the project activity or the bamboo fields. Environmental Impact Monitoring The project activity does not generate environmental impacts that need to be monitored and an environmental impact assessment has not been requested by any local or regional environmental authorities. Social Impacts The company has developed several social programs regarding bamboo exploitation. These programs are directly related to the project activity, and include the following: direct jobs have been created. These projects are related to bamboo harvesting, farm security and radio communication. 2. Partnership with SESI (Serviço Social da Indústria) for education programs. 3. Partnership with SENAR (Serviço Nacional de Aprendizagem Rural). 4. Possible partnership with UNEB (Universidade do Estado da Bahia). 5. Creating awareness programs regarding the use of bamboo in the surrounding communities. Utilization of bamboo as a renewable fuel In order to keep a steady operation of the biomass-fired boiler it became necessary to guarantee a constant supply of bamboo. Penha owns five farms which, combined, give a total of 3,000 hectares dedicated solely to bamboo plantations. Bamboo is a group of woody perennial evergreen plants in the true grass family Poaceae, subfamily Bambusoideae, tribe Bambuseae. The bamboo species utilized as biomass is the Bambusa vulgaris. Species from the Poaceae family are not restricted or protected under the Brazilian Forestry Code, nor are non-native, exotic species such as Bambusa vulgaris. 8

9 Thus, although an environmental license for harvesting the bamboo is not required, this activity is closely monitored by Penha. To this effect, a Forest Management Department within Penha was specifically created to ensure that bamboo plantations were harvested in a sustainable way. The company developed three suppliers to harvest, transport and deliver the bamboo biomass to be used in the process. An explanation to the sustainable management of the bamboo is provided below: Current Area of Bamboo Plantation (total) hectare Plantation Density 150 ton/hectare Bamboo Consumption 33,252 ton/year Bamboo Consumption 120 ton/day Required Area of Bamboo for Harvesting 292 hectare/year Years to Bamboo Growth for harvesting (maximum) 3 years Area Required for Sustainable Harvesting 876 hectare Table 3 Bamboo consumption calculations for sustainable management Source: Penha - Foresty Management Department Bamboo over 3 years old becomes more difficult to harvest due to its size and hardness, therefore a 3-year period is recommended for rotation. This would require only 876 hectares for sustainable harvesting out of the over 3,000 hectares available. In addition, Penha has an Integrated Management System (IMS) currently in place at other locations, including an ISO 9000 certification. Penha is in the process of implementing this system for its Santo Amaro Facility. This IMS covers quality, safety and environmental issues. As a conclusion, there are no environmental aspects considered significant for the implementation and operation of the project activity. It is inferred that the project activity does not have any implications that could adversely impact the environment. A.4.3 Estimated amount of emission reductions over the chosen crediting period: Years Estimation of annual emission reductions intonnes of CO2 e , , , , , , ,526 Total estimated reductions (tonnes of CO 2 e ) 206,682 Total number of crediting years 7 Annual average of the estimated reductions over the crediting period (tco 2 e ) 29,526 9

10 A.4.4. Public funding of the small-scale project activity: There is no current funding from Annex 1 countries involved in the project. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: The described project activity is unique within Penha s operation and is not a part of a larger project. Current production at Penha is based solely on steam supplied by the above mentioned boilers. There is neither other source of thermal energy nor consumption of renewable fuels of which this project activity could be part of. Penha s project activity supplies the entire amount of steam necessary for production, displacing fossil fuel as the main fuel utilized at their facility in Santo Amaro City, Bahia State. SECTION B. Application of baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: The applied baseline methodology is AMS-I.C: Thermal Energy for the User with or without Electricity, Type I Renewable Energy Projects, version 13. B.2 Justification of the choice of the project category: The applied baseline methodology is AMS-I.C: Thermal Energy for the User with or without Electricity, Type I Renewable Energy Projects, version 13, which states, as a condition of its applicability, that the thermal energy generation capacity of the project does not exceed 45 MW. Project Thermal Capacity Calculation: Based on data provided by the manufacturer, the net installed thermal capacity for the new boiler is calculated as follows: Operating Pressure: 15 kg/cm 2 Steam Temperature: 200 ºCelsius Steam enthalpy: kcal/kg (at 200 ºC, 16 bar) Boiler Steam Production: 25 ton/h Boiler Thermal Capacity = (25 ton/h)*(667.1 kcal/kg)*(1000 kg/ton)/(10^6 Gcal/kcal) = 16.7 Gcal/h Conversion Factor Gcal to MWh = Boiler Thermal Capacity = (16.7 Gcal/h)*(1.163 MWh/Gcal) = 19.4 MW Hence, the installed capacity is lower than 45 MW. B.3. Description of the project boundary: 10

11 For the proposed project activity, the project boundary is from the point of fuel storage to the point where the thermal energy is utilized. Thus, the project encompassed the storage of bamboo fuel, the biomass boiler, and the thermal energy generated for paper production. B.4. Description of baseline and its development: To demonstrate the baseline scenario in a transparent manner, the steps from the Tool for Assessment and Demonstration of Additionality (Version 3) are considered. The application of the steps, considering barrier analysis, was implemented at item B.5 bellow of this document and the conclusion achieved made possible define the baseline and project scenario as bellow. The possible scenarios for the baseline scenario and for the proposed project activity are: 1. Steam Generation from fossil fuels. 2. Steam Generation from biomass other than bamboo. 3. Steam Generation from bamboo, without the incentive of CDM. Selection of Baseline Scenario The following table summarizes the results from the barrier analysis for each identified scenario. As shown in this table, Scenario 1 does not face any barriers. Scenario 2 faces four important barriers. Scenario 3 faces three significant barriers. Table 4: Summary of Barrier Analysis Identified Barriers Scenario 1 Scenario 2 Scenario 3 Oil based boiler Renewable wood Renewable bamboo 1 Laws and regulations No Yes No 2 Technical barriers No Yes Yes 3 Biomass exploitation No Yes Yes 4 Socio-economical No Yes Yes The barrier analysis clearly shows that the most probable scenario would be steam generation from fossil fuels. Scenario 2 faces all barriers analyzed and scenario 3 faces three of four barriers analyzed. Thus, the proposed activity, scenario 3 (steam generation from bamboo), can be selected and the project activity. Considering the baseline scenario and the project scenario above, the simplified baseline for renewable energy projects, as specified in the selected small scale methodology I. C. Thermal Energy for the User with or without Electricity, is calculated from the fuel consumption that would have been consumed in the absence of the project activity times an emission factor for that displaced fossil fuel. IPCC default values for emission factors and heating values, as well as other parameters used in the baseline calculations, are presented in the following table: 11

12 Variable Emission Factor Value Units IPCC ID Reference NCV FO EF C FO OXID FO η FO Net calorific value for fuel oil Carbon emission factor for fuel oil Oxidation Factor for fuel oil Efficiency of the plant using fossil fuel 43.3 MJ/kg FO 20.0 tc/tj FO Not Applicable Not Applicable IPCC ID:17144 IPCC ID:17174 IPCC ID: Table 5 IPCC Emission factors utilized in the baseline calculations (a) Source: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories(Table 1-3 on page 1.23 of the Reference Manual) (b) Source: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories(Table 1-4 on Page 1-24 of the Reference Manual) (c) Source: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. Reference Manual Vol 3. Table 1-6, page 1.29 CBC Industrias Pesadas S.A. oil-fired boiler technical information sheet In order to convert the carbon emissions for fuel oil to CO 2 emissions, it has to be multiplied by a factor of 44/12. Thus, the utilized fuel oil emission factor is obtained as follows:. EF CO 2,FO = 20.0 tc/tj FO x 44/12 EF CO 2,FO = tco2/tj FO Where: EF CO 2,FO = the CO2 emission factor per unit of energy of the fuel that would have been used in the absence of the project activity in (tco2 / TJ), obtained from IPCC default emission factors. The emissions of this project are considered null, since biomass is a renewable fuel. During its growth period, the bamboo planted in the farms surrounding the factory reabsorbs all the carbon emitted during the bamboo combustion. Efficiency of the baseline plant (η FO ) was determined as the efficiency of the existing oil-fired CBC boiler, as specified in the manufacturer s technical manual. The efficiency utilized is 89%. The methodology considers leakage if the energy generating equipment is transferred from another activity or if the existing equipment is transferred to another activity. Since neither of these options apply to Penha s project activity no leakage will be taken into account. 12

13 B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity: To demonstrate additionality of this project activity, the steps from the Tool for Assessment and Demonstration of Additionality (Version 3) were followed. Technological, common practice and other barriers were identified and evaluated. Step 1. Identification of alternatives to the project activity consistent with mandatory laws and regulations Step 1.a Define alternatives to the project activity: Possible scenarios for the proposed project activity are: 1) Steam Generation from fossil fuels. No biomass is harvested for generating steam. In the absence of the project activity steam generation would be carried out by oil-fired boilers. Aside from Penha s long-term experience with oil-fired boilers for steam generation, fossil fuels are considered to be one of the most commonly used technologies due to their burning efficiency, low maintenance and the relative simplicity of storing and handling fossil fuels when compared to biomass fuels. 2) Steam Generation from biomass other than bamboo. In this scenario steam generation is achieved by using other types of biomass such as wood, wood-waste, sawdust, rice husks, bagasse etc. 3) Steam Generation from bamboo, without the incentive of CDM. This scenario considers the use of bamboo as fuel for steam generation without the incentive of the Clean Development Mechanism. Step 1.b - Consistency with mandatory applicable laws and regulations: 1) Oil fired boiler. The fist alternative scenario, steam generation by an oil-fired boiler, can be considered business as usual there are no restrictions or applicable laws against consuming fossil fuels for steam generation. Furthermore, no pertinent environmental licenses have any demands regarding reducing GHG emissions, or, more specifically, one that demands that the company switches the fuel used in the boiler. 2) Biomass other than bamboo. Utilizing other types of biomass such as wood, wood-residues, bagasse, etc, is not subject to any regulations other than environmental licenses for its exploitation. Wood has to be gathered from reforested, sustainable areas, and a license has to be granted by environmental authorities for this activity. Since there are no sustainable wood forests managed by Penha, this option implies in achieve wood supply from the market, facing risks of no renewable biomass and even not legal biomass being supplied to the company, exposing Penha to legal risks. 13

14 To corroborate this fact the study Fatos e Números do Brasil Florestal (Facts and Numbers of Forestry Brazil from Sociedade Brasileira de Silvicultura SBS (Brazilian Forestry Society) state that National production of wood to be used as fuel originated from native forests in 2005 totalized 45,4 Mm 3. State of Bahia is the main producer of this wood (non renewable biomass) representing 26,1% of the total, followed by the states of Ceará (10%), Pará (8,2%), Maranhão (6,2%) and Paraná (6,2%). Planted forests to fuel production, as informed at the same report, is concentrated at Rio Grande do Sul (36,3%) and São Paulo (19,2%). The main usage of the wood (native and planted) is charcoal (43%), household consumption (29%), industries (19%), agribusiness (8%) and other applications (1%). 2 Penha has also contacted biomass supplier at the region evaluating possible long term contracts in buying biomass, receiving a negative guarantee of long term supply for wood as demonstrated by documents. 3) Steam Generation from bamboo, without the incentive of CDM For the third scenario, harvesting of the bamboo (Bambusa vulgaris.) does not require any permits or environmental licenses, since it is cataloged as being from the Poaceae family. Species belonging to this category are not restricted or protected under the Brazilian Forestry Code, nor are non-native or exotic species such as Bambusa vulgaris. Hence, all three alternatives are in accordance with mandatory applicable laws and regulations, but wood supply faces regulatory risks, which are not totally impeditive but bring high legal risks to the company, representing a barrier to this scenario. Step 2. Investment analysis Not considered under the analysis, since step 3 was chosen. Step 3. Barrier analysis Sub-Step 3a. Identify barriers that would prevent the implementation of the project activity For the proposed project activity, the following barriers were identified: Technical barriers Biomass exploitation infrastructure Depredation due to socio-economical conditions of the area Technical barrier related to specialized combustion technology 1) Oil fired boiler. No technical barriers were identified to this scenario. 2) Biomass other than bamboo. 2 MME, 2006 Destaques de Energia em

15 The commissioning of a new biomass-fueled boiler demanded a series of process modifications, which would not have been necessary in the event the oil-fueled boiler continued operating (Penha s facility already owned the structure required for the operation of this oil-fired boiler). Considering a scenario of Penha investing in its own forest, process modifications would consist of implementing, aside from the biomass boiler, the following items: a) A weighting and monitoring system for receiving the wood: A system for monitoring and documenting the wood received at Penha had to be implemented by the Forest Management Department. This system would be responsible for quantifying the amount of wood and consequently, determining the amount to be paid to the harvesting companies; A transportation and feeding system of biomass to the boiler, which consists of a conveyor equipped with monitoring system and a biomass storage system, a vertical silo. The wood storage area should be dimensioned to store biomass fuel for the duration of the rain season, which lasts for approximately four months. 3) Steam Generation from bamboo, without the incentive of CDM The usage of bamboo as fuel to the steam boiler faces technical barriers associated to the high content of silica at it s constitution, forming silicate inside of the boiler, which damaged it. This issue first develops on the burning base, which would constantly become clogged. The damage caused to the boiler was such that the steam produced was not enough to support production, both in quality and quantity. Penha in collaboration with H. Bremmer & Filhos Ltda (the technology provider) carried out a series of tests with this type of biomass until a unit was designed and adapted to run on bamboo biomass by using a rotating burning base system. Penha took the decision to implement this new technology in spite of the precedent of complications using that type of fuel at their facility. This renewable biomass fueled boiler demands a much more rigorous maintenance and operation than the oil-fired CBC boiler owned by Penha. The boiler is scheduled for bimonthly maintenance stops, so that the silicate can be removed and the boiler performance can be evaluated. On the other hand, the commissioning of a new biomass-fueled boiler demanded a series of intricate process modifications, which would not have been necessary in the event the oil-fueled boiler continued operating (Penha s facility already owned the structure required for the operation of this oil-fired boiler). These process modifications consisted of implementing, aside from the biomass boiler, the following items: b) A weighting and monitoring system for receiving the bamboo: A system for monitoring and documenting the bamboo received at Penha had to be implemented by the Forest Management Department. This system is responsible for quantifying the amount of bamboo and consequently, determining the amount to be paid to the harvesting companies; c) A PBK 350/700 wood chipper for processing the bamboo biomass; d) A transportation and feeding system of biomass to the boiler, which consists of a conveyor equipped with monitoring system and a biomass storage system, a vertical silo model SEC 15

16 D/100. The bamboo storage area had to be dimensioned to store biomass fuel for the duration of the rain season, which lasts for approximately four months. Technical and safety training was also an important component for the development of the project activity and it was required for all personnel involved with biomass harvesting, processing and boiler operation. Harvesters received safety and fire abatement training from Penha s Forestry Management Department. The difficulties to develop, install, operate and maintain a biomass-fired boiler and this extra infrastructure for monitoring, handling and processing biomass are superior to the difficulties of continuing using an oil-fueled boiler. Thus, without the CDM incentives, these technical and technological barriers could have prevented the use of biomass as fuel. Biomass exploitation infrastructure 1) Oil fired boiler. No barriers related to biomass exploitation infrastructure were identified to this scenario. 2) Biomass other than bamboo. To guarantee the supply of renewable biomass, Penha needs to chose between establish its own planted forest or buy renewable wood from the market. Implementation of Penha s own forest faces barrier since the eucalyptus forest that has a faster growing when compared with pinus, would take at least 6 years to be implemented, with advanced investment. As mentioned at step 1.b above, there is no guarantee of supplying renewable wood by the market during this period. The maximum guarantee that Penha achieved was 6 to 8 months, which is not enough to make this scenario feasible. Also, the implementation of new planted forest faces the same barriers explained bellow to bamboo scenario with complications since it would be necessary the extraction of bamboo and starting new forest plantation. Supply renewable wood by the market faces barriers as exposed at step 1.b. There are no suppliers of sustainable biomass that can guarantee long term contracts in the region. 3) Steam Generation from bamboo, without the incentive of CDM Even though the company owns the farms where the bamboo forests are located, the exploitation of this resource had to consider the following: a) Developing suppliers to harvest the bamboo in a fashion that guarantees bamboo supply and good working conditions while preserving the plantations; b) Developing a Forest Management Department to monitor the sustainable exploitation of the bamboo; The issue of the sustainable harvesting of the bamboo clashes with a cultural problem particular to this region. When bamboo was used as a raw material for cellulose production, bamboo 16

17 harvesting was done by subcontracting individuals who organized and employed local workforce. Payment to this workforce was proportional to either the amount of bamboo each individual harvests or the amount of time they spend at work. These workers were employed through informal contracts with not job securities or benefits. Penha had to go through a process of deconstructing this model of bamboo harvesting and at same time, create and train third-party companies that could deliver the bamboo stalks directly to the company s production yard under safe and healthy conditions for the workers. Incentives lead to the creation of three companies, which would be responsible for growing, harvesting and transporting the bamboo. These companies work under management and sustainability principles established by Penha. In order to monitor all these activities a Forest Management Department was created within Penha s organization. This department supervises bamboo exploitation from the identification of the harvesting areas to the receiving and processing of the bamboo stalks. The Forest Management Department is responsible for making sure that the process is sustainable and that environmental, safety and health regulations are followed. Depredation due to socio-economical conditions of the area 1) Steam Generation from fossil fuels. No barriers related to depredation due to socio-economical conditions were identified to this scenario. 2) Steam Generation from biomass other than bamboo. The scenario of planted forest faces similar barriers as bamboo scenario explained bellow. A possible alternative would be buying renewable wood from the market, but as explained above, this options is not feasible as a project scenario. 3) Steam Generation from bamboo, without the incentive of CDM. Communities surrounding the farms established a different barrier. Due to the lack of job opportunities, a type of economical activity in this region is the fabrication of hand-made bamboo skewers. This market is encouraged by merchants that come from Salvador, the state s capital. These skewers fulfill several purposes; nonetheless they are mostly used for making espetinhos, a popular snack in Salvador s beaches. Local inhabitants of Santo Amaro and the areas surrounding the farms also use bamboo for building and reinforcing their dwellings and fences. This situation originates continuous invading of the bamboo farms by men and women from the district of São Braz. The trespassers cut and collect bamboo in a disorderly and random way, utilizing only about a third of the bamboo stalks and leaving the rest lying on the ground. Penha, through its Legal and Forest Management Departments, has been organizing meetings to inform the communities that such acts are illegal and constitute crime against private property, although no legal action has been or is being considered. Penha s intentions are that the jobs created help improve the local economy and eventually stop this scavenging practice. Sub-Step 3b. Show that the identified barriers would not prevent the implementation of at least one of the alternatives (except the proposed project activity): 17

18 The following table that is the same table 4 presented at section b.5 of this document summarizes the results from the barrier analysis for each identified scenario. As shown in this table, Scenario 1 does not face any barriers. Scenario 2 faces four important barriers. Scenario 3 faces three significant barriers. Table 4: Summary of Barrier Analysis Identified Barriers Scenario 1 Scenario 2 Scenario 3 Oil based boiler Renewable wood Renewable bamboo 1 Laws and regulations No Yes No 2 Technical barriers No Yes Yes 3 Biomass exploitation No Yes Yes 4 Socio-economical No Yes Yes As demonstrating above, scenario 1 is the baseline scenario and scenario 3 is the project scenario. Step 4. Common Practice Analysis Sub-step 4a. Analyze other activities similar to the proposed project: It is not a common practice in Brazilian facilities to use bamboo in biomass-fueled boilers and it was not possible to identify other project of this kind in Brazil during the development of this document. To the best of Penha s and Bremmer s knowledge there are no other bamboo areas suitable for this type of exploitation or of other boiler using bamboo as fuel for steam generation. Common types of biomass sources include wood, wood residues, bagasse and others. Since these resources do not require a specifically developed combustion technology, and there are no records of other bamboo exploitation projects, the project activity is considered the first of its kind and represents a risk for investing as the rest of the industry can still run with more common, better understood fuel technologies. Sub-step 4b. Discuss any similar options that are occurring: It was not possible to identified similar cases in Brazil of bamboo exploitation as biomass fuel. To the best of Penha s knowledge the common practice of the paper industry is to consume either fossil fuels or other types of biomass such as wood-residues, which less monitoring and processing requirements. As a result, project scenario is considered additional. B.6. Emission Reductions: B.6.1. Explanation of methodological choices: The project consists steam generation, using renewable biomass as fuel instead of fuel oil. As per the methodology, the baseline emissions displaced by the project activity are calculated according to the amount of oil necessary to produce the same amount of steam that would be produced annually with the biomass-fueled boiler. The reasons for choosing the methodology AMS I.C are: The project activity consists of biomass-based thermal generation; 18

19 Thermal generation capacity is specified by the manufacturer, is less than 45 MW. The project activity is not a co-fired system. As per the selected methodology, baseline emissions for thermal generation shall be calculated as described below: BEy = HGy EF CO * OXID 2, FO FO / η FO Where: BEy = Baseline emissions in year y HGy = Net quantity of steam/heat supplied by the project activity in year y in TJ EF CO 2,FO = Emission factor per unit of energy of the fuel that would have been used in the baseline plant in (tco 2 /TJ). A default IPCC emission factor was utilized, as explained in section B.4 of this document. OXID FO = IPCC default oxidation factor for fossil fuels (OXID = 0.99) η FO = the efficiency of the plant using fossil fuel that would have been used in the absence of the project activity. And, HGy= P steam, y * Enthalpy* MJ/kcal/1000 Where: P steam, y = Steam produced by the biomass boiler in year y, in metric tonnes Enthalpy = Heat content of the steam produced by the biomass boiler, as specified by the Manufacturer (Enthalpy = kcal/kg steam) = Conversion factor for mega joules to kilocalories Efficiency of the baseline plant was determined as the efficiency of the existing oil-fired CBC boiler, as specified in the manufacturer s technical manual. The efficiency utilized is 89%. There are no project emissions (PEy). Leakage is considered only when the energy generating equipment is transferred from another activity or if the existing equipment is transferred to another activity. Since this is not the case, leakage will not be considered. 19

20 Thus, emission reductions (ERy) are calculated as follows: ERy = BEy PEy Leakage B.6.2. Data and parameters that are available at validation: Data / Parameter: P steam, y Data Unit: Tonnes/year Description: Steam generated during each year y Source of data used: Data estimated from historical steam consumption at the facility Value applied: 129,600 Justification of the Estimated steam consumed at the site, based on 60% of the biomass-boiler choice of data or capacity. description of measurement methods and procedures actually applied: Any comment: Data / Parameter: Enthalpy Data Unit: Kcal/kg Description: Steam enthalpy of the biomass-fired boiler Source of data used: Data as supplied by the boiler manufacturer Value applied: Justification of the Reference, so from this data, the amount of steam, in thermal units, can be choice of data or estimated for each year y. description of measurement methods and procedures actually applied: Any comment: Data / Parameter: η FO Data Unit: % Description: Efficiency of the CBC oil-fired boiler Source of data used: Data as supplied by the boiler manufacturer Value applied: 89 Justification of the Efficiency, determined as the most likely scenario in the absence of the project choice of data or activity, for the baseline emission calculations. description of measurement methods and procedures actually applied: Any comment: Data / Parameter: EF C FO 20

21 Data Unit: tc /TJ Description: Carbon emission factor of fuel oil that would be burned in the absence of this project Source of data used: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories(Table 1-4 on Page 1-24 of the Reference Manual) Value applied: 20.0 Justification of the For conservativeness a default IPCC emission factor for fuel oil was selected in choice of data or the baseline emission calculation. description of measurement methods and procedures actually applied: Any comment: Data / Parameter: EF CO 2,FO Data Unit: tco 2 /TJ Description: Carbon dioxide emission factor of fuel oil that would be burned in the absence of this project Source of data used: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories(Table 1-4 on Page 1-24 of the Reference Manual) and conversion factor for C to CO 2 of 44/12. Value applied: Justification of the choice of data or For conservativeness a default IPCC emission factor for fuel oil was selected in the baseline emission calculation. description of EF CO 2,FO = 20.0 tc/tj FO x 44/12 measurement methods EF CO 2,FO = tco2/tj FO and procedures actually applied: Any comment: Data / Parameter: NCV FO Data Unit: % Description: IPCC recommended Net Calorific Value in MJ/kg of fossil fuel Source of data used: According to the information available at Annex 3 Value applied: 43.3 Justification of the For conservativeness a default IPCC net calorific value for fuel oil was selected choice of data or in the baseline emission calculation. description of measurement methods and procedures actually applied: Any comment: Data / Parameter: OXID FO Data Unit: % Description: IPCC recommended oxidation factor for fuel oil Source of data used: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. Reference Manual Vol 3. Table 1-6, page

22 Value applied: 99 Justification of the For conservativeness a default IPCC oxidation value for fuel oil was selected in choice of data or the baseline emission calculation. description of measurement methods and procedures actually applied: Any comment: B.6.3 Ex-ante calculation of emission reductions: Baseline emissions, equal to the emission reductions, are calculated for the crediting period based on the amount of steam generated by the project activity, the emission factor of the fossil fuel and the efficiency of the oil-fired boiler. Baseline emissions in the year y are calculated as follows: BEy Where: HGy EF CO = * OXID / η 2, FO FO FO (1) EF CO 2,FO = tco 2 /TJ And: HGy= Psteam, y * Enthalpy* MJ/kcal/1000 (2) P steam,y = 216,000 tonne/year Enthalpy = kcal/kg From equation (2) HGy = 129,600 tonne/year * kcal/kg tco 2 * MJ/kcal / 1000 HGy = TJ/year Emission reductions are then calculated from equation (1) BEy = TJ/year * tco 2 *0.99/TJ / 89% BEy = 29,526 tco 2 /year 22

23 B.6.4 Summary of the ex-ante estimation of emission reductions: Year Project scenario GHG emissions estimative Baseline scenario GHG emissions estimative Leakage estimative Total GHG emission reduction (tco 2 e) (tco 2 e) (tco 2 e) (tco 2 e) , , , , , , , , , , , , , ,526 Total (tco 2 e) 0 206, ,682 B.7 Application of a monitoring methodology and description of the monitoring plan: B.7.1 Data and parameters monitored: Data / Parameter: Data Unit: Description: Source of data used: Value of data: Description of measurement methods and procedures to be applied QA/QC procedures to be applied Any comment: Data / Parameter: Data Unit: Description: Source of data used: Value of data: Description of measurement methods and procedures to be P steam, y Tonnes Amount of steam generated by a biomass-fueled boiler in the project scenario during year y Data will be measured by an electronic steam flow meter. Measurements will be made at the exit of the bamboo-fired boiler Continuous data Information gathered on the monitoring system at the exit of the biomass-fueled boiler by a steam flow meter with digital output. Data will be archived electronically. Steam flow meter will be calibrated annually by the equipment manufacturer. For additional data consistency, steam values can be compared with quantity of paper produced during year y. P paper, y Tonnes Gross paper production during year y Production records. Information measured at the end of the production system cycle Daily values Information gathered from the monitoring system at the end of the production line, consisting of paper machine 1 and paper machine 2. This item is measured constantly, and will be used for additional data 23

24 applied QA/QC procedures to be applied Any comment: consistency of the amount of thermal energy generated. Data quality is assured by the Penha s integrated quality management system, which monitors quality of the final product. Data / Parameter: EF CO 2,FO Data Unit: tco 2 /TJ Description: Carbon dioxide emission factor of fuel oil that would be burned in the absence of this project Source of data used: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories(Table 1-4 on Page 1-24 of the Reference Manual) and conversion factor for C to CO 2 of 44/12. Value applied: Justification of the choice of data or For conservativeness a default IPCC emission factor for fuel oil will be selected in the baseline emission calculation. description of EF CO 2,FO = 20.0 tc/tj FO x 44/12 measurement methods EF CO 2,FO = tco2/tj FO and procedures actually applied: Any comment: Data / Parameter: Data Unit: Description: Source of data used: Value of data: Description of measurement methods and procedures to be applied QA/QC procedures to be applied Any comment: Data / Parameter: Data Unit: Description: Source of data used: Value of data: Description of measurement methods and procedures to be applied FC BIOMASS,y Tonnes Amount of renewable biomass consumed at the boiler in year y Biomass consumption records. Measurements will be taken by volume and will be measured density of the bamboo chips. Daily values Information gathered at the biomass processing stage, from bamboo reception to the storage yard and the feeding silo. Bamboo received at the plant will be monitored volumetrically and by weight, and the amount paid to the harvesters will be determined from these measurements. Density of bamboo chips will be checked periodically with a known volume container and a calibrated scale. SF BIOMASS,y Tonnes per m 3 of steam Specific renewable biomass consumption to generate the steam at the boiler in the year y Calculated based on biomass consumption records and steam produced at renewable biomass boiler records. Daily values Specific sheet will be considered to make the calculation based on steam generation and biomass consumption data. 24